Thomson Reuters
Morning, and Happy Fat Tuesday!! Big allocation day in Japan.. Nikkei loses 5% as investors flush into JGB's, knocking their 10YY down to -.08% at one point. First G7 10's to go negative. Banks crushed in Tokyo - Nomura lost over 9%. Given that backdrop, US Futures are down 50bp, while Europe is red across the board in heavy volumes. The DAX is down 60bp, weighed by those financials, as DB is doing a dead-cat bounce, basically unchanged now after popping 5% on the open. UBS off 2%, CS 4%, Barc 1% and gravitating toward lows. Tech seems to be rebounding globally a bit, but those Miners are under pressure in London after Anglo's CEO warned. The Periphery is a mess - Greece on 20Y lows and several Italian banks were halted limit down, again. Over in Asia, China, Hong Kong, South Korea, Singapore and Taiwan were all thankful they were closed for Chinese New Year celebrations. Aussie closed down nearly 3% as Banks plunged, and India retreated another 1%.
The US 10YY is actually up on the day, as European sellers of Sovereigns have surfaced, bouncing Germany's 10YY off 20bp. Focus remains on Currencies tho, where $/Y at 15M lows, and under that critical 115 level that is seen as a "Line in the sand" for their exporters - while the Euro continues to be bid up as carry trades reversed in Asia and Europe. That said, Haven trades are being unwound a bit, with Gold retreating from 8M highs and back under $1200/oz. Perhaps some of the selling is due to the bid under Oil, which sees WTI struggling to stay upside $30 as the International Energy Agency warned again on Oil prices as we await inventory data in the States. Natty Gas is off 2% as warmer weather begins rolling thru the States - while Gasoline is off 1% as heavy stockpile headlines await.
Quiet day on the data calendar, with JOLTS Job Openings at 6, and Wholesale Inventories for December at 10. We do get World Agricultural Supply & Demand Estimates (WASDE) at high noon, just before the 1pm auction of $24B in 3Y notes. After the close, we get API data for Crude, Gasoline and Distillates at 4:30. Throughout the session, focus will be on headlines from the Credit Suisse Financial Conference, and we should be getting President Obama's Fiscal Year 2017 budget proposal. Tonight focus drills down on the North-East, where the New Hampshire Primaries are being held.